Income Beginner: Introduction to Deposit Accounts

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1.
Funds swept from your central asset account are deposited into _______.
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A money market account. This lets unallocated funds earn a higher rate.
2.
Because deposit accounts pay relatively low yields, investors have little need of them.
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False. Deposit accounts can be useful tools for accumulating investment capital, sheltering funds during market downturns, and maintaining a supply of liquid cash.
3.
Deposit accounts can be appropriate for investors with low risk tolerance.
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True. The high degree of security they provide make deposit accounts an effective alternative for those who cant afford to lose their capital.
4.
An account that combines savings, checking, credit/debit card services, and a line of credit in one account is a _______.
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Central asset account. A central asset account combines many banking and investment features in one account.
5.
How much of your deposit account is insured by the FDIC or NCUA?
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$250,000 ($250,000 for retirement plan accounts). The FDIC or NCUA insures each depositor up to these limits.